Vonage: Building a Brand at Scale with Rishi Dave CMO (CxOTalk #344)

0
2


Growing a company at scale. We’re speaking with Rishi Dave, who is the
chief marketing officer of Vonage. Tell us about Vonage. It’s a B2B SaaS, communications company, providing
both applications for communications as well as an API platform where companies can code
in voice, video, messaging, et cetera, communications into whatever applications they’re developing. In this growth period that you’re in and in
this period of transformation, maybe a good place to start is, what is the role of marketing
in achieving those goals? When you’re in markets that are growing 20%,
30%, and some of our markets are growing 50%, marketing is fundamental to driving that growth
and driving share. The way I like to think about is, and what
we’re doing, we’re thinking first and foremost what is our corporate strategy as a whole
to really drive in these fast-growth markets. Then what marketing strategy will help drive
that both from a high-level perspective when you talk about brand, as well as just hardcore,
tactical operations, demand gen, et cetera? Then how do you create the ability to be incredibly
agile in these hypergrowth markets that are constantly changing? Well, I guess that kind of begs the question,
how should markets, what can marketers do in order to be agile as their company is changing,
as the markets are changing, and as consumer expectations around them are also changing? Agility is the fundamental challenge when
you’re in these hypergrowth markets and when you’re trying to transform. From my perspective, it all starts with, what’s
the fundamental strategy for the company? When you’re in these markets that are growing
so much and you’re trying to transform and be agile, what you find is that marketing
has as much of a seat at the table and is driving that corporate strategy as much as
anyone else in the company because your go-to-market strategy, sales and marketing, is kind of
what you lead with when you’re in a hypergrowth market. That’s really how you differentiate yourself. Now, the way you drive agility is, first and
foremost, you have to kind of create the right culture within marketing where people have
to feel comfortable that you’re never going to have stability. We’re constantly changing. We’re constantly reorganizing. We’re constantly adjusting our operations
based on how the markets are changing, how the company is changing, how our competitors
are changing because our competitors are very agile, the technology is changing, communications
is fundamentally changing every day, and so we have to be agile. Whenever we create a process or anything within
marketing, we fundamentally look at agility first. Let me give you a quick tactical example. Many times, we think of marketing technology
and we put that into a technology bucket where we do an evaluation, we bring in a technology,
and we keep it there for a long time. We have a very different approach. We look at marketing technology like you look
at a stock portfolio. It’s SaaS. You are constantly bringing in great technology
and then, what’s working, you scale. What doesn’t work, you kind of get rid of
it and bring something else in. You have to constantly bring that agility
in because not only is your company and market changing, but the technology is changing and
evolving as well. In every single process and every single org
design, fundamentally, we want people, process, and technology. A fundamental piece of that is agility. You said that you build agility in. I find that a very interesting statement. How do you go about doing that? One thing that I think we frequently don’t
talk enough about when we talk about the marketing function and we talk about CMOs in general,
is the need for operational excellence. We don’t talk enough about operational excellence
when we talk about marketing. We talk about strategy, brand, lead gen, digital
transformation, all of that. When you need to design for agility and transformation,
you have to design for operational excellence. When you say, “How do we do that?” we spend
a lot of time thinking about how we build operations, how we measure it, how we collect
data, how we get responses very quickly, not just from outside our company but also inside
like salespeople, people on the front line, et cetera, and how we build that into the
process, fundamentally, when we do things and how we put operational excellence principles
into every single one of those processes. I recall, on this show, speaking with Kim
Stevenson, who at that time was the chief information officer at Intel. She used that same phrase. She said, “The first thing that IT needs is
to begin with operational excellence.” When you talk about operational excellence,
can you describe the components of what that is? The old adage: people, process, technology. I would add one more to that, which is data
and analytics. For example, the entire BI and analytics function
here at Vonage, whether for marketing or not for marketing, all sit centralized under marketing
because data and analytics is a fundamental piece of that operational excellence. That’s how I think about operational excellence
in kind of those four components. Therefore, what are the implications for you,
as you’re designing your marketing programs, doing your hiring, and all the various things,
the activities, the operations that you do? Yeah, we want to be data-driven, and so there
are a few fundamental things that I think about when I think about data. One is, you want to have a clean, integrated
data set. First and foremost, we focused on that because,
if you don’t have data, you can’t make decisions and you can’t optimize your operations. Secondly, you want the right analytics on
top of that data. Now, this is where it directly answers your
question on people. Once you build the right analytics that are
driving the right insights, then what I think about from a people perspective is, “How do
I embed those insights into the day-to-day processes of the people who have to use them?”
which is a piece of operational excellence that not enough people talk about. They always talk about the sexy stuff like
AI and all that stuff. They don’t talk about the dirty stuff like
clean data and they don’t talk about how you create operations and processes where you’re
embedding those insights into the day-to-day lives of the people who have to action it
who are not necessarily thinking about technology or data in every part of their lives. Let me give you an example. Salespeople: I want the salespeople to decide
what accounts they go after, what accounts they call based on not just kind of their
gut feeling, although that does play a role, but also based on the accounts that we are
seeing based on real-time analytics, both outside the company as well as analytics that
we have on them, based on who they are, et cetera. We want them to look at account lists, look
at how we prioritize them, and then go after the highest opportunity at any given moment. Now, in order to do that, we can’t just give
them a bunch of analytics and say, “Go forth.” We have to simplify it. We have to embed it in the tools that they
use every day like the CRM. We have to make it simple, like, “Here is
your gold list. Here’s your silver list. Here’s your bronze list. Here’s what you say. Here’s what we’ve told them already,” et cetera. Really help them optimize their time to go
after the right accounts to drive productivity. That’s a great example of how we drive that
operational excellence from a people, process, and technology perspective. A lot of what you’re talking about is, in
effect, the change management of setting the goals and gradually leading people to approach
the various functions, parts of marketing based on the coordinated strategy that you’re
putting together. Absolutely. You make a great point that I don’t want people
to forget is that that example was more of an operational tactical example but I think
of it almost like a pyramid where you have to start, first and foremost, from your corporate
strategy. The corporate strategy is all about who you
are, how you’re different, and how you win. One of our board members said a great thing
to me. He gave me a great piece of advice. He said, “Look. When you develop your corporate strategy,
look at the day-to-day why you win. Look at the themes and then do more of that.” It’s very simple in some ways. Don’t just look at why you lose but look at
why you win because you could lose for a multitude of reasons, but there is a handful of reasons
why you win. You start with the corporate strategy. Then you kind of develop the marketing strategy. That drives your brand strategy. Then that drives your activation, operations,
lead gen strategy. Then you have all that underlying enablement
capabilities under that. We have a couple of questions from Twitter,
and I’m just going to take them in order. Sal Rasa asks, “As you were developing and
adjusting these operational principles, what surprises emerged? What surprised you?” When you’re trying to change things, you actually
still have to run your day-to-day business. I was surprised by the complexity of balancing
those two. It’s almost like right now there are two buckets
of activity. One is what I call “Run the business,” which
is, hit those pipeline numbers, hit those growth numbers every single day; hit those
numbers. Then there are these whole set of initiatives,
which are, change the business initiatives, which are all about, okay, are we allocating
our dollars correctly? What is our marketing technology strategy? Does it need to change? Do we need to change the way we approach digital,
et cetera? That’s what surprised me the most is that
complexity in balancing change the business and run the business. That’s a tough thing to balance. It never ends, either, because when you’re
in a high growth market that’s changing so much, you have to learn how to drive a steady
state where those two things are constantly in motion. How do you drive a steady state when you’re
being pulled in two very different directions? On the one hand, you’re being pulled. Everything around us is changing and we need
to be agile–to use your term–and fast. At the same time, we cannot disrupt our existing
lines of business and customers, and so we need to keep things the same, right? I sort of have this image of, like, the angel
and the devil on your shoulders, one of them saying, “Rishi, you have to be agile and fast.” “Rishi, you can’t. You can’t. You have to be stable and stay the same.” [Laughter]
It is brutal. [Laughter]
[Laughter] That’s all I can say is, it is probably, in
my opinion, one of the most difficult things that I deal with day-to-day. I’m a little bias here, but it is why the
CMO job is so hard compared to all the other C-levels. Okay, I’m biased, but that’s what I believe
because people look at the CMO or the marketing department as both, especially when you’re
in a hyper-growth, B2B, tech environment. Anything that’s not working, go to marketing. You have to kind of change that, but any time,
day-to-day, we’re off on revenue, again, marketing, pipeline, et cetera. To answer your question directly, there is
no easy answer. What I have tried to do is, it kind of goes
back to that planning, strategy, and then activation. From a top-down strategy perspective, I try
to be or we try to be as clear as possible in terms of what are the change the business
initiatives that we’re focused on at the moment and what are the run the business numbers
that we have to hit. How are we doing that? Who is responsible for that? Secondly, I have loosely organized my marketing
organization around that where, for the different product groups that we have, I have leaders
who are responsible for delivering the run the business metrics but I also have centralized
organizations who are functionally very strong who are kind of, to some degree, helping the
run the business but, also, have people in there who are managing change the business
projects as well. To a certain extent, my organization is set
up to handle that but you still have that conflict, day-to-day. I would imagine that this also comes into
play as you’re making investment decisions of where to allocate resources for marketing. People don’t realize that, when you change
the business, it could use money but it could also generate money. What I mean by that is, for example, if you
find that you can consolidate your technology around key processes that you know are working
and are scaling, that frees up money that you can use for run the business or the next
experiment that you do in change the business. I think of it as, of course, I have a budget
that I’m given, but I think a lot about, okay, change the business will be both a user of
cash and a generator of cash. Run the business is almost always a generator
of cash unless things aren’t working, and so, as a CMO, you have to balance those initiatives
and balance how you manage your budget that way as well. People frequently think it’s a fixed amount
and you have to allocate dollars. You can find dollars, too. That’s the benefit of a fast-changing environment
is that it sometimes uses money and sometimes, when things are not working or something has
changed, you don’t need to attach a certain market or a certain way anymore, you can stop
that, generate money, and then put it someplace else. It’s not just expenditure, but it is actually
investment. Absolutely. We have another couple of questions from Twitter. Earlier, you were talking about the role of
data. Jeffrey Rosenberg is asking, “What is your
perspective on the role of qualitative insights in this world that is so now data focused?” Qualitative insights are just as important
and not any less important. Let me give you a few examples. Let’s take the example I gave earlier on prioritizing
accounts using analytics, real-time analytics, and what we know about the account and what
we’re seeing. At the same time, we seek qualitative insights
from our customers but also our salespeople because they’re on the frontlines every day
talking to customers. They know their markets, et cetera. What we found is, if you do just analytics
but you don’t bring in the expertise of the salespeople and the experiences of the salespeople,
then it becomes academic and not very practical. We work with sales leaders, in addition to
looking at the analytics, to determine whom we go after. You have to bring in the qualitative analytics. Secondly, and this is probably what the questioner
was asking more about, is qualitative research actually adds a lot of color and value to
the quantitative research. Sometimes, when we’re trying to do quantitative
research, we’ll do qualitative research first to even understand what type of questions
we should ask in quantitative research or validate. You have to balance the two together. Also, with qualitative research, you get a
lot of nice nuances. Sometimes, the most breakthrough ideas come
through the qualitative research where something unexpected is said that you can key off of. You have to do both together. Everybody says, “Well, it’s the data that
matters.” Trying to convince the board of a decision,
the CEO of a decision, or a customer to do something, what I find is that that emotional
storytelling sometimes is much more powerful. That kind of visceral, like, “Here are what
customers said to us,” that’s more powerful than any quantitative data that you could
have. You have to balance the two. You’re absolutely right. The other thing is that we live in such a
quantitative data-driven world that bringing in that qualitative, human aspect actually
makes things more powerful in some ways. We have another question from Twitter. Gus Bekdash is asking, how do you compete
as a service provider with apps? We are actually an apps provider, so we’re
not a service provider, as we’ve historically been. We are actually a B2B SaaS applications provider,
so we provide two types. One is, we have SaaS applications for things
like unified communications, call center as a service, and then we have an API platform
where the largest enterprise in the world kind of code in our APIs to enable their applications
to provide capabilities like voice, video, two-factor authentication, et cetera. At this point, we’re actually a SaaS software
provider versus a service provider, although there is a service component of it, of course. Your business has changed a lot, over the
years, since the company was founded. It absolutely has. It absolutely has. We’ve evolved tremendously. This is part of the marketing challenge is
that your audience may remember what Vonage used to be, which was a consumer VoIP company
with incredibly interesting, innovative, advertising, breakthrough pricing, creative, and really
kind of upended an entire industry. We’re doing it again. We’ve evolved through acquisition, as well
as just plain organic growth, to be a true, 100%, best in class, B2B SaaS provider for
communications and APIs. We’ve kind of integrated that all together. Well, let’s use that as a way of jumping into
customer experience because, as a SaaS provider, it’s pay as you go. You’ll live and die on the basis of customer
experience and customer satisfaction, and so what are the factors that you think about,
and what drives customer experience? We think of it as the subtotal of the total
experience the customer has with us, not just with marketing, not just with sales, but also
post-sale, customer support, billing, et cetera. We have a lot of work to do. Most companies do, and we’re no exception
because the expectation of customers is rising every single day. That’s a massive challenge, for any SaaS company
included. That’s pretty much how we look at it. Then, going back to what I had said earlier,
how do you prioritize that when there are so many touchpoints? We try to leverage research and data as much
as we can and try to derive core insights that tell us what’s working well and let’s
double down on that and what’s not working and help prioritize what experience principles
we focus on because you have to be very focused. Absolutely, we think about that. Then, obviously, we have a bias because we
talk to customers about customer experience, too. Ultimately, when you think about it, and this
is why I’m excited about this industry that we’re in now, is that customer experience
ultimately is about communications nowadays. That’s how we think about the industry that
we’re in now is that, if customer experience is all about communications, how do you create
a highly customized communications experience leveraging apps and APIs for your customers
based on who you are and what customers want? That’s what we’re very focused on. What are the components of doing that? First and foremost, what’s the customer journey? How do they want to experience, consume, learn
about what you do on your site, off your site, with your salespeople, in the market, review
sites, et cetera? We try to understand the customer journey
and what the customer wants, the customer of today and the customer of tomorrow, and
as that evolves. That’s a critical component. Then we think a lot about, okay, how do we
create experiences or capabilities that enable a customer to accelerate around that journey
and obviously come to us? Because the expectation of the customer has
changed so much, it’s not just about calling into your call center. It’s not just about any one communication
channel, but it’s about every communication channel, whether it’s your mobile app, your
website, your online chat, calling in, et cetera. We think a lot about how we integrate those
interactions. How do we make sure we’re aware of where the
customers want to go? How do we make sure every one of those interactions
is optimal? For example, when they call us, and we’re
still working on this, but we don’t want to put them through this massive, complex IVR. We have analytics. We have an AI. We can actually know who they are based on
their CRM and then create a personalized experience even when they call in. We’re constantly thinking about these things
because, when you think about customer experience, we’ve done research on customer experience,
in general. What’s interesting is, clearly, they think
about three things. Customers think about three things. One is, did I get done what I wanted to get
done. Number two, can I do it fast; no obstacles? Number three, which surprised us but, actually,
is very interesting is, how did it make me feel? How did I feel about that experience? You have to think about all three of those
things, so it does matter what a person says on the phone, what they say in a chat, how
they experience your app. It’s not just about getting it done as soon
as possible, but it’s also about giving them a positive feeling about your company and
brand. You’re talking in terms that we typically
think about business to consumer, but you’re a B2B company and, yet, you’re talking in
this way about how you feel, how the customers feel about us. Yeah, it’s interesting because what we’re
finding is that customers, they don’t compare us always to our competitors. Of course, they do. They do, obviously, when they’re mid to bottom
of the funnel and they’re trying to find a provider. When they think about their experience, in
particular, they’re not thinking about their experience versus necessarily our competitors. They’re thinking about their experience with
us compared to their best experience they have, which is often a consumer experience:
Netflix, Amazon, Apple, et cetera. We’re not even close, but we have to think
about that as a comparison point and elevate our experiences to that point. That’s kind of the aspirational goal that
I have. We have another question from Twitter. Evan Kirstel is asking, “In such a competitive
market, how do you retain that edge?” I’ll just say, let’s focus it on customer
experience. How do you stand out in such a competitive
landscape? You have to understand what your differentiation
is and articulate it clearly to your customers. I would say those are kind of the two biggest
things. Then I would say the third thing, actually,
is getting that to your customer or prospect in the way they want to get that information. I would say those are kind of the three key
principles. Again, we’re very focused on, as we’re transforming
those three things, and how we really get better and better at them. Another dimension of transforming marketing
is the ability for marketing to work across different parts of the company, shape what
the company is doing, and be influenced by other parts of the company, and so how do
you think about the relationship with other business leaders inside the organization? It’s a great question and another reason why
I’m going to bring my bias in; the CMO and the marketing jobs are the hardest jobs on
the planet. [Laughter] I’m biased. Marketing can’t achieve anything without the
support and the partnership of the broader organization, whether it’s the sales organization. We have to partner extremely closely to make
sure that we’re driving that go to market engine in an optimal way, whether it’s with
the product organization to make sure that the product organization and we are articulating,
involving, talking about marketing the products in the optimal way, the solutions, et cetera. It’s the finance organization ensuring that
we’re allocating capital correctly and the dollars correctly against the optimal strategy. It’s the strategy. It’s everyone. Marketing by itself cannot be successful without
strong partnerships with the rest of the organization. We try to invest a lot in building those strong
partnerships, both at the executive level, but also at the kind of day-to-day process
level as well. When I talk about operational excellence,
it would be wonderful if it was just within marketing, but that’s not the easy part but
the easier part. It’s also marketing and the rest of the organization. What are the kind of metrics that marketing
is evaluated on that you see among your peer CMOs in other companies and also at Vonage? How do you demonstrate the value of marketing,
I guess, is the question? What I see for ourselves, but also when I
talk to CMOs, ultimately, there is kind of practical and there’s kind of emotional. Practical is, are you generating the revenue
and the closed sales that we need to generate to achieve our numbers? There’s that component, which is a very practical
one. Now, notice I talked about sales and not pipeline. Pipeline is obviously something that we look
at but, ultimately, what matters is closed sales. I can generate a whole bunch of leads, but
if they don’t generate closed sales then it doesn’t really matter. That’s where that strong partnership with
sales comes in. Are we closing the right amount of sales,
especially in these hypergrowth markets? That would be a big one. The second one is, clearly, are we driving
our brand perception? The first numbers tell you how you’re doing
now. Your brand perception kind of helps tell the
story of where you’re going. That’s a big opportunity for us because we
have a challenge there, a challenge of, we had the Vonage business where we started. Billions of dollars of commercials were spent
on that, and that’s kind of what’s in people’s heads. There are benefits to that because everyone
knows us. A lot of people love us. They love the innovation. We have high top of mind awareness, but then
we have to change the perception of who we are. We are working a lot on how we do that. We have another question from Twitter. Going back to the customer experience, this
is an interesting one. You’ve grown by M&A and diverse lines of businesses
and areas. How do you manage different customer experiences? Do you even try to develop a common customer
experience? How do you manage that? We have very different customer types. I would say the two biggest are developers
who are kind of our customer persona for our API platform, which is a big business that’s
growing super-fast and the market is growing super-fast as well. Obviously, developers are very different versus
business decision makers who are kind of looking at things differently. I would say, at the highest level, we can’t
create a common experience because developers are just fundamentally looking at things differently. They operate differently. The way they “buy” or “use” APIs is very different
versus somebody who is buying a SaaS subscription. We do split the experience between those two. Then there are subsegments under that, but
that’s kind of broadly how we would split it. It depends on your business. Rishi, as we finish up, what advice do you
have for marketers who are in a changing environment in order to drive the kind of results that
you’ve been talking about? The biggest advice and the biggest challenge
that I’m finding is culture. It is difficult. It is hard. It is hard for me. It’s hard for my organization. I hear it every day from my organization on
just how difficult it is to be in this environment that’s under constant change and these markets
that are in hypergrowth. Now, it’s exciting. That’s why we’re all here. Day-to-day, it’s hard. One of the things I think that’s critical
to think about is how you create a culture, how you create stability, to the extent that
you can, and how you get the right people in place so that we could all kind of, together
as a team, handle this hyper-changing environment. It’s really exciting. There is nothing more exciting than being
in a market that has a huge future and is growing at a super high rate. That’s super exciting. But, every day, sometimes is hard and you
have those moments. I think the number one piece of advice I’d
give is culture, culture, culture. Talent management, then, and finding the right
people is a core part of how you’re spending your time, it sounds like. Yes, but not enough. I need to do a better job because it’s hard. Again, this is why the CMO and the marketing
department is the hardest job at a company because we have to do the run the business. We have to do the change the business. We have to also drive our culture and work
as a team. We’ve brought in companies through acquisitions
as well, and so it’s exciting and we have a very unique position in the marketplace
that nobody else has that excites our customers and prospects. I never feel like we’re doing enough, but
we’re making good progress. You’ve been kind of talking around this, but
what are the obstacles or the challenges that CMOs can expect to face when trying to drive
change such as we’ve been discussing? Lots. [Laughter] Lots. One is, how do you bring your organization,
your peers, and your board on the transformation journey that you’re going on? The challenge is that it’s not just about,
here’s the answer; it’s about, here’s the insight that’s driving the answer. That is constantly changing. Bringing all the constituencies along on this
journey is a big challenge. Leadership is extremely hard in this type
of environment. It’s super exciting but hard. How do you constantly talk to your organization? How do you communicate change? How do you address the exhaustion but the
excitement, these exciting environments that we’re in? How do you listen to feedback and act on it
quickly, all those kinds of things, is another big challenge? Then the third challenge, I would say, is
back to the first topic, operational excellence. That’s hard to do and so that’s kind of a
big piece as well because sometimes having good operations in place helps with everything
else. As we finish up, final advice on how to build
that kind of operational excellence? What are the challenges? I know we’re just about out of time, but what
do you do? [Laughter]
The key thing is communication because it takes time. Being very, very open, honest, and direct
with especially the marketing organization, but also everyone else, is probably the biggest
thing that you can do. The communication and being sure that people
understand what you’re trying to do, where you’re going, and then getting them onboard. Absolutely. Absolutely, and realizing that it’s a journey. Rishi, Dave, thank you so much for taking
time to be with us today. Thank you. We’ve been speaking with Rishi Dave. He is the chief marketing officer at Vonage. Before you go, please do subscribe on YouTube
and subscribe to the CXOTalk newsletter. We have great shows coming up and we will
see you soon. Have a great day, everybody. Thanks so much for watching.

LEAVE A REPLY

Please enter your comment!
Please enter your name here